Pence embraces flat tax

Indiana Republican Rep. Mike Pence would scrap the current tax system and replace it with a flat tax for all citizens.

“The best option, the most pro-growth option is a flat tax. I believe it is time that America adopted a flat tax and scrapped the current system once and for all,” he said Monday in at the Detroit Economic Club. “It’s fair, it’s simple, it’s effective. It’s an idea whose time has come,” he said.

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Pence is thinking about running for president in 2012, and the Detroit speech was billed as a major economic policy address designed to outline his positions on the economy and job creation. While Pence has enjoyed enthusiastic support from social conservatives, he is working hard to cultivate support among the fiscal conservatives that are driving the tea party.

In backing a flat tax, Pence would join past GOP presidential hopefuls who made the idea a key part of their campaigns — most prominently, Texas Sen. Phil Gramm in 1996 and Steve Forbes in 1996 and 2000. Under a flat tax, all Americans would pay the same percentage of their income in taxes. Supporters tout its simplicity and its potential to rein in government spending. Opponents view is as a rejection of progressive taxation, allowing to rich to pay the same percentage of their incomes as middle-class and low-income Americans.

In his speech today, Pence again called for amending the Constitution to limit federal spending — a measure he and other House Republicans introduced in March.

“By limiting federal spending to 20 percent of our nation’s economy in the Constitution, except for certain conditions such as a war, we will create a framework for this and future Congresses to live within our means and have the incentive to grow the economy,” he said.

Pence used the speech to condemn the Bush administration’s bank bailouts, and he used a perch in America’s automotive capital to attack the Obama’s administration’s bailouts for General Motors and Chrysler.

“I even opposed bailing out GM and Chrysler,” he said. “I welcome the rebound of that company with an open heart, but I still think that most Americans know that it would have still been better for GM and for the country” if GM had been allowed to go through normal bankruptcy proceedings.

Pence has said that he will wait until early next year to decide whether he’ll make a bid for the Oval Office. He’s also considering running for governor in his home state; Republican Gov. Mitch Daniels — another possible candidate for the 2012 nomination — is term-limited, and Pence would almost certainly face a primary from sitting Lt. Gov. Becky Skillman.